The Relationship Between the US Money Supply and Crypto

[Suba]

In general, money supply refers to the amount of money in circulation, both cash and demand deposits, within a country. The USD is known as the world's currency, so it will have a significant impact on crypto and other investment instruments.

1. If the US money supply increases, the prices of crypto/Bitcoin and other investment assets will also increase.
2. For USD-pegged stablecoins, such as USDC and USDT, if liquidation demand increases, it will result in inflationary pressure.
3. Conversely, if the US money supply is tightened or reduced by raising interest rates, market liquidity will decrease and crypto/Bitcoin prices will fall.

 

[Trush Jodie]

The reason why prices of bitcoin would increase when US money supply increases is that there would be more money available to invest on assets.